An integration of age-based salary function and increase ratio method for pension valuation in the Philippine setting

• Main Authors: Arellano, Liselle Ann S., Mabuhay, Michael Andrew P.
• Format: text
• Language: English
• Published: Animo Repository 2008
• Subjects: Pensions > Mathematical models; Retirement income > Planning; Mathematics
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/5077
• Institution: De La Salle University

The parametric age-based model is a combination of concepts obtained from the traditional Increase Ratio Method proposed by Marples and Salary Function model proposed by Carrier and Shand. After getting the parameter estimates with the help of Statistical Analysis Software (SAS), the derived model was able to compute for future salaries, specifically the salary before retirement. Consequently, pension benefits were determined using the three models, which are Carriere and Shand's model for salary functions. Medina and Moya's salary scale, and the researchers' derived age-based salary scale. Furthermore, salary gains and losses were examined and compared.